Three years after Michelle Lewis opened her first Painting with a Twist franchise in downtown Ferndale, business was so good that she needed to double the studio's size to 5,000 square feet on West Nine Mile Road.

Lewis' story isn't an aberration downtown, where 14 businesses have expanded into larger space during the last two years or are opening this year, according to Cristina Sheppard-Decius, executive director of the Ferndale Downtown Development Authority.

In 2000, vacancy in downtown Ferndale was well over 30 percent, she said. Today, the core downtown is just 2 percent vacant, and the outskirts of the downtown are just 4 percent vacant.

Small-business expansions are only part of the story in Ferndale. Industrial companies are investing in new space, a mixed-use development that will add needed office space and parking downtown is being planned, and businesses throughout the inner ring suburb are growing their workforces.

City officials and business owners credit an improved Michigan economy and a simpler city business licensing and permitting process to Ferndale's latest investment spurt.

It hasn't been easy, said Mayor David Coulter, and the city had to take a long hard look inward to make some changes.

"One of the challenges any community like Ferndale faces is evolving from a mentality that you are a writer and enforcer of rules to treating businesses as customers in your community," he said.

"Municipalities have been behind the curve in terms of looking at economic development that way, but we've embraced the notion that when businesses locate and grow in Ferndale, it strengthens our city overall."

Magnet for the nontraditional

Lewis, who owns the Painting with a Twist franchises in Ferndale and Farmington, had originally considered locating her Ferndale location in Royal Oak before it opened in September 2010.

"I was just spinning my wheels" in Royal Oak trying to get city approvals, she said. "I was ready to rock and roll with this. Ferndale wasn't as popping, but it just seemed to be the new spot where folks started going. So I turned to Ferndale, and it just seemed to be the perfect place."

In her more than three years downtown, Lewis has noticed a range of businesses expanding and more unique businesses entering the market.

"We have stores or boutiques that you can't find everywhere, not just the 'Joe Blow' store on the corner or the average liquor store or anything like that," she said. "It kind of rounds out the whole atmosphere of the Ferndale flavor, which is more of a different flavor than you might find in average cities."

There is also new downtown office development planned that will upgrade local offerings, said Derek Delacourt, director of the Community & Economic Development Department.

Jake Sigal, the founder and former CEO of Ferndale-based Livio Radio, which was acquired by Ford Motor Co. last year, plans to turn two city-owned surface parking lots behind the former Old Navy store at Nine Mile Road and Woodward Avenue into a mixed-use development with at least 100 residential units, office space for second-stage tech companies, and a parking structure, Delacourt said.

Sigal said the additional office space would increase foot traffic during the day downtown and the parking structure would improve the parking situation during nights and weekends. Sigal is negotiating to buy the lots but has not submitted site plans for the project.

Construction would begin in the summer of 2015 at the soonest, Delacourt said.

Product manufacturing

Industrial and manufacturing businesses are also showing a renewed interest in Ferndale.

Last month, the Michigan Strategic Fund Advisory Committee approved $718,000 in city tax-increment financing incentives for an $8.6 million industrial renovation and expansion project for Brass Aluminum Forging Enterprises LLC on Wanda Street. Brass Aluminum, Valentine Distilling Co. and Allied Printing Co. are expected to occupy a 220,000-square-foot building that will be renovated.

A 100,000-square-foot building will also be constructed in the project, which the Michigan Economic Development Corp. said will create about 50 full-time Brass Aluminum jobs and another 50 by other building tenants.

Allied Printing plans $10 million in investment over the next five years. That investment is for new equipment, an additional 61,000 square feet at the 220,000-square-foot Brass Aluminum building and additional employees, said Margaret Fitzgerald, CFO of Allied Printing. It has 94 employees and four locations in Ferndale on Woodward, Hilton Street, Wanda and Rosewood Street.

On Burdette Street, Search Optics Inc. has about 85 employees and expects to grow to 150 by the summer, said Christian Fuller, chief relationship officer for the company, which moved to Ferndale from San Diego three years ago. It is on track to reach its five-year goal of 300 employees, Fuller said.

WIKIPEDIA

Looking down Nine Mile Road in downtown Ferndale, where the core vacancy rate is just 2 percent.

Search Optics is a marketing firm specializing in search engine optimization and Web development for the automotive industry.

"It's wonderful to get a new retail business that hires a couple folks, but when you can attract a company that hires hundreds of people and pays millions of dollars in taxes, it has the potential to help firm up the financial foundation of your community and attract jobs," Coulter said

Companies like Autolights LLC, Roe Photo LLC and Dearborn Axle Inc. have also added a total of 20 new jobs in Ferndale for a total investment of $1.4 million, according to Irene Spanos, economic development and community affairs director for Oakland County.

Still other kinds of businesses have diversified their business model — such as the Rust Belt Market on the northwest corner of Nine Mile and Woodward.

The 15,000-square-foot artist and designer market, which used to be open only during weekends, is now hosting events throughout the week, Delacourt said.

Chris Best, who owns and operates the market with his wife, Tiffany, said about 4,000 square feet of the Rust Belt Market center has been gated off for events like weddings and bar mitzvahs. Film production companies from California have also inquired about reserving the space for wrap parties, he said.

The market, which occupies the former Old Navy store, has served as incubator space for Rock City Eatery and HenriettaHaus Coffee Roasters LLC, both of which now have locations in Hamtramck, Delacourt said.

Further south and east, the Woodward Avenue Brewery also purchased an 11,000-square-foot building on Saratoga Street, said Matt Osiecki, vice president of industrial brokerage in the Southfield office of CBRE Inc. WAB will only move its brewing operations there, and no beer will be served onsite.

The building sold for $160,000, according to Washington, D.C.-based real estate information service CoStar Group Inc.

Efficiencies at City Hall

Delacourt said licensing and permitting have been streamlined between 2011 and last year at the request of the Mayor's Business Council. He said that since then, the city has refined its approval processes and the technology used by city inspectors.

For example, temporary certificates of occupancy are now allowed, free occupancy certificate walk-throughs to identify issues ahead of time are available, and building inspectors use tablets for faster inspections and more time efficiency.

"We implemented all of that stuff almost immediately," Delacourt said. "To get companies to agree to expand and invest in their space, they need to know that the community is behind them."

Coulter said he formed the council in the model of Oakland County Executive L. Brooks Patterson's Oakland County Business Roundtable.

"I don't mind stealing good ideas," he said.

Railroad real estate

Ferndale's role as a logistics hub may be expanding, although the city is wary of too much growth in this segment.

The Canadian National Railway Co., formerly Grand Trunk Western Railroad, has purchased a pair of properties on Fair Street in the last six months, and is planning to expand its intermodal transportation facility on 29 acres on Fern Street. The railroad has a meeting with the city later this month.

CNR purchased properties at 350-360 Fair St. and 380 Fair St., Delacourt said. Those 60,000-square-foot ($975,000) and 29,000-square-foot ($775,000) buildings were purchased in December, according to CoStar. The sellers were listed as Dragutin Pernik and Hand of Grace Charitable Organization.

Coulter said he would oppose an expansion if it "would take those industrial buildings off the (city) tax rolls and create a lot of industrial rail traffic in a place very close to a neighborhood."

Currently, the buildings are assessed by Ferndale and the city collects the taxes on them. If the properties become part of a railway system, they are assessed by the state and the state collects the taxes under Michigan's Public Act 282 of 1905.

Delacourt and Coulter said specific expansion plans have not yet been submitted to the city. Patrick Waldron, a CNR spokesman, said there are plans to expand the facility for additional container storage. How large the expansion would be has not been determined.

"We are working on a plan for an expansion that is being developed and we plan on meeting with the city of Ferndale in the coming weeks to review and discuss those expansion plans," Waldron said.

Geographic advantage

Beyond the railways, Ferndale's proximity to freeways like I-696 and I-75 and major roads like Woodward Avenue and Eight Mile and Nine Mile roads make it a prime location for expansion and investment, Osiecki said, especially for distribution or service-related companies.

Credit Union ONE has added another 18 employees at its Ferndale headquarters on West Nine Mile, and 57 total, Delacourt said.

Matt Osiecki

Osiecki said the streamlined government improvements have been additional selling points.

"The local government, inspectors and economic development team have been very helpful in getting uses that may not be allowed in other communities, such as a brewery or a distillery," he said.

What challenges remain for Ferndale? Osiecki said much of the existing industrial inventory is outdated and requires substantial modernization. Plus, there isn't a wealth of office space, he said.

That's where the Sigal project is key, Coulter said.

Going forward, the city is looking outside the downtown boundaries for continued expansion and redevelopment in the city, he said.

"We saw the opportunity for growth in the larger industrial and commercial sectors that had been neglected in our community to some extent," he said.